Growth stocks are not just bought for what they are now, but also for what they could become in the future. In this context, let's take a look at three exciting growth stocks whose revenue could explode in the coming decade. Machine vision expert Cognex Corporation (NASDAQ:CGNX), OLED technology and materials supplier Universal Display Corporation (NASDAQ:OLED), and industrial software company PTC (NASDAQ:PTC) are all companies with a big future. Here's why.

Universal Display Corporation

OLED materials and technology owner Universal Display Corporation (UDC) is a play on the growing adoption of OLED displays and panels. While the primary market is centered on high-end smartphones and to a lesser extent TVs, the technology can also expand in developing markets such as lighting, IT/wearables (laptops, watches, etc.), and automotive. UDC's partners include many leading consumer electronics heavyweights like Samsung and LG.

UDC management believes the OLED display market will grow from $29.9 billion in 2020 to more than $44.5 billion in 2023, an increase of 49%. Wall Street analysts expect UDC's revenue to grow by 93% in the same period from $430 million to $830 million.

a tv screen

Image source: Getty Images.

However, it's not just about revenue growth -- it's highly likely that UDC will see significant margin expansion as well. UDC sells high-margin materials used in OLED production (around 54% of 2020 sales), and it also generates royalty and license revenue (43% in 2020) from its sales. As such, UDC generates a relatively high operating margin (36.7% in 2020), and with the increase in scale coming from rising end demand, analysts believe the operating margin will be close to 48% in 2023. Based on these figures, UDC's operating profit could grow by more than 150% to around $400 million in 2023.

Meanwhile, there's plenty of long-term growth potential from the company's ongoing development of more efficient blue-emitting OLEDs and lower-cost manufacturing techniques. All told, OLED technology and UDC have a bright future.

Cognex Corporation

Continuing on the OLED theme, machine vision company Cognex also has heavy exposure to the technology. The company has three major end markets: consumer electronics, automotive, and logistics. According to CEO Rob Willett, "Much of our revenue in consumer electronics relates to the assembly of smartphones and the production of related components." This includes using machine vision to gauge the application of OLED displays. As smartphone manufacturers ramp up spending on new technologies (5G, OLED, etc.) Cognex should see plenty of long-term growth opportunities.

In logistics, Cognex has exposure to the fast-growing e-commerce warehousing market. The company's machine vision and barcode-reading technology improve the productivity of e-commerce logistics. Cognex's logistics-based revenue grew 40% in 2020, and it's now the company's second-largest market.

boxes in an e-commerce warehouse

Image source: Getty Images.

The automotive industry is traditionally an early adopter of automation technology, so it's no surprise that it's been Cognex's core market in the past. Unfortunately, the combination of a slowdown in global car sales in 2019, pandemic-related production shutdowns in 2020, and light vehicle manufacturers holding back investment in internal combustion engines meant that automotive-based revenue declined 20% in 2020 and represented around 20% of total sales.

That said, and notwithstanding the production curtailments due to semiconductor chip shortages, automotive production should grow in 2021 (it could hardly get worse than 2020). Manufacturers are ramping up spending on electric vehicle (EV) development.

Analysts expect Cognex's sales growth to get back to a double-digit rate, and over the long term, spending on display technologies, EVs, and e-commerce logistics will only increase.

PTC

The industrial software company PTC is a play on the increasing digitization of the factory as part of the so-called fourth industrial revolution. In a nutshell, this is the growth in the use of internet-enabled technologies to improve a physical asset's performance by using digital technology.

PTC's core products, namely computer-aided design (CAD) and product lifecycle management (PLM) software, will benefit from the shift to the cloud because cloud-based collaboration enables closer cooperation in the design process.

For example, the design of an engineered product can be quickly adjusted using real-time feedback from another function in a company, say sales and marketing. Also, PTC is shifting its CAD and PLM products to a software as a service (SaaS) model, which should increase engagement with customers and enhance loyalty.

Augmented reality concept displayed on a tablet

Augmented reality at work. Image source: Getty Images.

Thinking longer term, PTC's growth platforms, namely the Internet of Things (IoT) and augmented reality (AR), will allow customers to model their physical assets digitally. In doing so, asset owners can improve their servicing through the use of digital technology -- a key plus in light of pandemic-related shutdowns.

Analysts have PTC's sales growing at a 13.5% rate over the next three years, with operating income rising at an annual rate of 20% in the same period. With the growth products (AR and IoT) expected to grow revenue at a 30%-plus rate over the medium term, PTC has excellent potential to grow earnings for many years to come.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.